Key takeaways
- The skill set required of internal audit leaders is expanding.
- They need to be technically competent and strategically savvy to deal with stakeholders.
- They also need to be effective leaders and strategists with good business acumen.
Internal auditors play a crucial role in ensuring proper corporate governance, risk management, and control within organizations. As the internal audit function evolves, so does the spectrum of skills required of an internal audit leader.
Here are the top 10 characteristics of exceptional internal audit leaders, and why they are so important.
- Credible
- Trustworthy
- Engaging
- Technically skilled
- Strategic
- Business minded
- Balanced
- Innovative
- Agile
- Influential
Professional auditors you can rely on
Frequently asked questions
Credible
Exceptional internal audit leaders must be able to establish and maintain credibility at a senior level within the organization. They will need to go toe to toe with chief executives and other C-Suite stakeholders, which requires excellent communication skills and the ability to challenge the views of senior management. When doing so, they must use data to develop a strategic plan that aligns with the organization’s business goals and includes specific steps for achieving success. Well-crafted audit reports help solidify an internal auditor’s credibility, ensuring their findings and recommendations are taken seriously and acted on by senior management.
Trustworthy
Trust-building is essential for internal audit leaders, who must be able to establish and maintain trust with stakeholders at all levels, including management, employees, and external stakeholders. A good chief audit executive can engage and influence stakeholders throughout the organization while cultivating a high level of trust and respect. Although developing these relationships can take time, the benefits are undeniable.
Engaging
Credibility and trust-building go hand in hand, feeding into a third characteristic that is becoming key for internal audit leaders: stakeholder engagement. Building collaborative relationships with stakeholders is a must, and successful auditors use effective communication to reduce push-back during the auditing process, promote a greater understanding of internal audit’s value in the business, and increase the speed at which information is shared in response to audit requests. This is where building a strong internal audit team can improve stakeholder collaboration and ensure an efficient and effective audit process.
Technically skilled
While employers are placing more emphasis on soft skills, technical competence remains fundamental to heads of audit positions. Key stakeholders expect the highest level of technical competence with regard to internal controls, and all internal auditors need to be familiar with a range of data analytics platforms, leveraging them to add value to the organization in support of internal audit activity. Other considerations, such as compliance audits, vary by industry. For example, regulatory awareness is especially important in financial services and banking, so having a skills inventory and a talent model that corresponds to the organization’s risks and needs is critical.
Strategic
While an audit is the third line of defense, businesses want more from their corporate governance areas, which often involves an increasingly active responsibility in strategic thinking. Internal audit leaders must embrace and leverage new technologies to deliver on their strategic directives, proactively addressing potential issues instead of merely reacting to them. This level of planning is essential not only for internal audits but also for external audits to help organizations identify risks and uncover areas of opportunity for improvement.
Business minded
Internal audit leaders must possess a solid understanding of the organization’s business operations, financial reporting processes, and industry. Exceptional internal audit leaders should also have a strong business acumen and be able to apply their knowledge to identify risks and develop effective controls. They should recognize the essential elements that make their organization successful, adding value by building the internal audit department around these principles.
Balanced
Alongside traditional auditing skills, internal audit leaders with specialist capabilities are in strong demand. Banks and financial organizations are keen to hire auditors with specific regulatory prowess in liquidity, credit, and risk management. Knowledge of financial accounting and reporting systems, defense federal acquisition regulation supplements, and cost management system requirements are critical to a well-rounded auditor, and those with that expertise are in high demand. Having specialized internal audit skills, like data security as an example, are increasingly valued when conducting financial audits in industries with stringent regulatory requirements.
Innovative
While the type of required leadership skills can differ from business to business, effective leadership requires a complex, evolving skillset. The best leaders are always looking for new ideas and ways to increase effectiveness through innovation. When it comes to developing leadership ability, persistent improvement and assessment really does pay off.
Agile
The internal audit landscape is picking up pace, and leaders must be willing and able to make changes to their annual audit plans as unexpected shifts in market conditions occur. Quick thinking and problem solving are key skills at the heart of internal auditing, and the best problem solvers will apply creativity and innovation to address complex issues. These traits are particularly important for an operational audit, where the focus is on evaluating the efficiency of the processes, policies, procedures, and systems in place. With the continued evolution of regulatory demands, processes, and technology, audit professionals must take a forward-looking approach to providing assurance and advisory services, remaining open-minded and willing to engage in an appropriate risk level.
Influential
Company culture is increasingly important to corporate governance, and an internal audit is no exception. The function is moving away from the once prevalent “tick the box” compliance approach to one in which internal audit leaders are vital role models in keeping executive teams on course. By providing objective assurance, or an unbiased evaluation, internal audit leaders can influence a culture of transparency and continuous improvement. Instead of avoiding change, the best internal audit leaders work to inspire change and create an atmosphere where people are willing to implement innovative ideas.
Professional auditors you can rely on
If stakeholders find internal audit leaders to be highly effective with these characteristics, then the internal audit leader, as a trusted advisor, provides significant value to an organization. MorganFranklin Consulting’s internal audit professionals, which include former chief audit executives as well as technical and industry experts, drive value by aligning organizational focus and resources on strategic objectives and risks that are most critical to stakeholders. We draw from the depth and breadth of MorganFranklin Consulting to design and implement effective internal audit solutions. Contact us to speak with an internal audit professional today.
Frequently asked questions
Q: What is an internal audit?
A: An internal audit is an independent, objective assessment that helps an organization evaluate its processes, controls, and systems to ensure effective management of efficiency, risks, and compliance. Think of it as a way to keep everything in check so the company stays on track with its goals and avoids potential operational issues.
Q: How do internal audit leaders build trust within an organization?
A: Internal audit leaders build trust by consistently engaging with stakeholders at all levels of the organization and being transparent in their communication. By providing objective assurance and offering clear, well-supported recommendations, they show that they have the organization’s best interests in mind. Over time, these efforts cultivate a high level of respect and trust, especially with senior management, helping internal audit leaders influence the organization’s decisions and drive positive change.
Q: What skills make an internal audit leader effective?
A: Effective internal audit leaders require a blend of technical expertise, strategic thinking, and strong leadership skills. This often includes building credibility, fostering trust, and engaging stakeholders across the organization with effective communication skills. They should also embrace new technologies to stay ahead of potential risks and opportunities to provide valuable insights and help shape the organization’s strategic direction.
